Case Study Darling Chocolate (Group 7)
1. The population is very huge in St. Petersburg and therefore there is high sales potential. The population has experienced improvements in living conditions and material well-being; however the standard of living was not that high and incomes are still very low. The annual average growth of income was 23% and average annual inflation rate was only 12%. The average spending on food is about 56% of family budget. Only 2% of monthly expenditures for food are spent on chocolate and candy. Due to several reasons the attitude of Russian consumers is more or less negative towards imported (foreign) products. They perceive that domestic products are at least as good as foreign products. So, in general they prefer domestic products. Hence, it is not very easy to create brand awareness, because Russian consumers are very skeptical and don not trust advertising blindly. Chocolate is mass consumption product. Hence, all people are potential buyers. Russian consumers were desiring and increasingly demanding more variety in all kinds. The market can be divided into two categories, box chocolates which are seen as more luxury products and are often used for gifts; and chocolate bars which are used for personal (more spontaneous) consumption. The market experiences seasonal ups and downs; for example Christmas and New Year Holiday season and Women’s Day are very important times for selling chocolate. The intensity of consumption is around 4 kilograms per person per year. Consumers can be divided into heavy, medium and light user. There are many companies, foreign and domestic, are competing on the market. Foreign companies had been very successful due to low prices and aggressive advertising, but in recent years most consumers prefer domestic brands. The top three Russian companies in this business are Krupskaya, Azart and Red October.
One of the most important characteristics entering the market in St. Petersburg is...
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